In the end, Tessio ended up with a bad deal, but this doesn't mean that it was an unsmart move.

If Micheal never found out about Tessio's betrayal, Tessio would have been happy right? He would have had everything he would have wanted.

Now, UK, your saying that he died in the end, so it was not a smart move. But why did he die? Because Vito mysteriously knew that Tessio was the trader. Whether he was as smart as Einstein, or as stupid as Fredo, there is no way Tessio could have known that Vito knew.

Look at it like a checkers game. Ok, red has a plan to king one of his checkers. This could win Red the game if his (full-proof) plan works. He moves one space, not jumping or even indangering black, but black surrounds red, leaving red trapped. Black only knew because he was a genius who could read minds or something. This intellegence left red to lose the game.

Do you see what I'm saying? The outcome was sad, but the but the first decision, initially was a good one.